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''Hard work is like a staircase and luck is like a lift. Lift may fail but staircase is sure to take you to the top'' -- unknown

To be fearful when others are greedy, and be greedy when others are fearful -- warren Buffet

I am better investor because I am businessman,better businessman because I am no investor. -- Warren Buffet

10/18/2011

Investing in USA as of Oct,2011

How have stocks actually done over the past, during shorter periods of time? Below is data showing the total return of large stocks per year over the past five, 10, 20, 30, 40 and 50 years, according to IFA.com

. 5 years: 1.3%

• 10 years: 2.0%

• 20 years: 7.9%

• 30 years: 10.5%

• 40 years: 9.8%

• 50 years: 9.2%

If this is the case then investing in stock market for good return for atleast 10-15 years is not a good idea at all.

Then buy and hold concept of stocks is no longer valid.

Here is what i am thinking of now:

1. You need to buy stocks and sell when you see return of 5% atleaset in couple of months and re invest the return.

2. Buy and Hold may work for retirement accounts like 401k and IRAs as they are for long term but there are also consistent check needed periodically.

3. For 401k and IRA i feel it is always best to invest on high dividend yield stocks which may help boost your portfolio.

4. I also feel investing on real estate which are going to be used for commerical purpose is worth it.

5. Also if we can do real estate ladder (like investing in multiple commercial properties) will help for semi long term financial needs.

6. Also investing in gold either in form of jewelary/stocks/ETFs is also a great idea.


As always adjusting portfolio is very essential in timely manner for not to become victim for financial scams and downturns.

source:http://www.usatoday.com/money/perfi/columnist/krantz/story/2011-10-17/rate-of-return-for-stocks/50807868/1

1 comment:

The Money Paradise said...

I do agree with you that in current situation, it is better cash out whatever returns one gets from any stock to other promising stocks so that the risk of holding for longer period does not come in to turn things bleak.